ExxonMobil Agrees to $570 Million Clean Air Settlement

WASHINGTON, DC, October 11, 2005 (ENS) - ExxonMobil has reached a Clean Air Act agreement with the Justice Department and the U.S. Environmental Protection Agency (EPA) to reduce toxic air emissions by more than 53,000 tons per year at the company's seven United States petroleum refineries, the federal agencies announced today. The seven refineries, located in five states, represent 11 percent of the total refining capacity in the United States.

The settlement was reached through the lodging of two separate consent decrees, which require ExxonMobil to install and implement control technologies to reduce emissions of nitrogen oxide and sulfure dioxide that can cause respiratory problems and worsen cases of childhood asthma.

As a result of the agreement, emissions of nitrogen oxide will be reduced by nearly 11,000 tons per year and sulfur dioxide by more than 42,000 tons per year.

The company must upgrade its leak detection and repair practices, minimize flaring of hazardous gases, reduce emissions from its sulfur recovery plants, and adopt strategies to ensure the proper handling of hazardous benzene wastes at each refinery.


ExxonMobil's refinery at Baytown, Texas 20 miles east of Houston is one of the largest petroleum refineries in the world. (Photo courtesy Center for Land Use Interpretation)
The world's second-largest oil company, ExxonMobil has estimated that the capital cost of the injunctive relief program will be approximately $571 million.

Under the terms of the agreement, ExxonMobil will pay $8.7 million in civil penalties, and spend an additional $9.7 million on supplemental environmental projects in communities around the company's refineries.

Three states have joined in the settlement - Illinois, Louisiana, and Montana. As partners in the settlement, the states will share in the civil penalties.

The affected ExxonMobil refineries are located in Baytown and Beaumont, Texas; Billings, Montana; Joliet, Illinois; Torrance, California; Baton Rouge and Chalmette, Louisiana. The Chalmette Refinery is owned by Chalmette Refining, LLC, a joint venture between ExxonMobil and Petroleos de Venezuela S.A.

ExxonMobil's refinery in Chalmette, Louisiana was damaged by Hurricane Katrina and is temporarily out of operation. At the request of ExxonMobil, today's consent decrees reflect a more flexible compliance timetable for that refinery.

The proposed supplemental environmental projects include reducing air emissions by retrofitting or replacing municipal bus fleets in communities near the Baytown, Beaumont, Billings, Joliet, and Torrance Refineries.

The company will perform four emission reduction projects at the Baytown, Billings, Chalmette, and Joliet refineries, which are not otherwise required by law. In addition, ExxonMobil will provide $3.7 million to the Louisiana Wildlife and Fisheries Foundation for coastal habitat protection and restoration in the state.


ExxonMobil refinery at Joliet, Illinois (Photo courtesy Matrix)
Another supplemental environmental project requires the company to perform one or more prairie habitat restoration projects at the Midewin National Tallgrass Prairie in Illinois that will require in-kind contributions and expenditures of $1,050,000 by December 31, 2009. As part of the settlement, the company will donate 39 acres of land to the Midewin National Tallgrass Prairie that will count as $800,000 towards the required expenditure.

The land shall only be used and managed to conserve and enhance the native populations and habitats of fish, wildlife, and plants or for research, but not for residential or commercial development, the consent decree stipulates.

By December 31, 2007, ExxonMobil shall perform a supplemental environmental project designed to demonstrate and evaluate the use of Smart Leak Detection and Repair (LDAR) imaging equipment in identifying and quantifying emissions from leaking components and other sources of fugitive volatile organic compounds (VOC) emissions at the Baytown Refinery, at a cost of no less than $250,000.

By December 31, 2009, the company must control hydrogen sulfide emissions from episodic releases from atmospheric pressure release valves at the Billings Refinery.

ExxonMobil must submit a plan for the Smart LDAR Project, which shall be subject to EPA review and approval. The company must compare the results achieved with at least one Smart LDAR imaging camera against the results achieved through traditional monitoring to quantify the mass of VOC emissions from one or more leaking components monitored with a Smart LDAR imaging camera.

These settlements were reached under consent decrees without litigation as the companies agreed to work with the government in reaching settlements that would protect the environment and allow refiners to expand fuel production in compliance with the environmental laws.

These consent decrees are necessary because while the federal agencies complain that ExxonMobil has violated the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, and the release reporting requirements of the Comprehensive Environmental Response, Compensation, and Liability Act, as well as the Emergency Planning and Community Right-to-Know Act, and in addition has violated state implementation plans and other state rules adopted by the states and local air quality districts, the company disagrees.

ExxonMobil "denies" that it has violated or continues to violate federal, state or local laws rules, regulations and permits.


Lee Raymond is chairman and CEO of ExxonMobil. (Photo courtesy ExxonMobil)
The company maintains that it has been and remains in compliance with all applicable statutes, regulations and permits and is not liable for civil penalties and injunctive relief as alleged in the Complaint.

The federal agencies achieved the consent of ExxonMobil to the simultaneous filing of the complaint and lodging of the consent decrees. The company says its interest lies in achieving "its objective of cooperatively reconciling the goals of the United States, the Co-Plaintiffs, and ExxonMobil under the Clean Air Act and the corollary state statutes..."

Company executives did not comment publicly on today's settlement.

"The emissions reductions required by this settlement will lead to cleaner air and significant environmental and public health benefits," said acting assistant attorney general Kelly Johnson of the Justice Department's Environment and Natural Resources Division.

Today's settlement is the the product of a joint Justice Department and EPA program to reduce pollution in domestic petroleum refineries nationwide.

"This settlement brings more than three-quarters of the refining capacity in this nation under legally binding agreements to reduce their harmful emissions," said Granta Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance.

"That will lead to reductions of more than 315,000 tons of pollutants annually from the 17 refining companies that have agreed to come into compliance," Nakayama said.

Other U.S. refiners that have reached similar settlements are Koch, BP Amoco, Motiva/Equilon/Shell Deer Park, Marathon Ashland, Conoco, Navajo/MRC, Lion Oil, Ergon, Cenex, Coastal, Chevron, Giant, Citgo, ConocoPhillips, Sunoco and Valero Eagle.

The federal agencies said today these agreements "provide for a comprehensive, cooperative approach to addressing environmental problems across the industry, and create opportunities for lawful expansions of fuel production capacity."

Today's proposed consent decrees, filed today with the U.S. District Courts in Chicago, Illinois and Lafayette, Louisiana, are subject to a 30-day public comment period.

Copies of the consent decrees with ExxonMobil and Chalmette Refining LLC are available here.